Five Ways To Financially Prepare Your Children for College by Craig Middleton

Paying for College
Five Ways To Financially Prepare Your Children for College by Craig Middleton offers sound advice for parents who are getting ready to send a child off to college. It makes the point that starting real-world financial lessons prior to leaving home is vital and offers specific ways to make this happen. Teaching students how to budget and giving them real financial responsibility while they are still at home is essential and this article will help. Good luck.

Introduction

  • College is difficult for young adults. It is not just the academics that can be challenging, either. Students also have to manage their own money, often for the first time. This can be stressful for both a teen and his parents. You can make things easier for everyone by following these five tips for helping your children financially prepare for the college experience.

1. Involve Them in the Loan Process

  • Your children will likely be paying off student loans long after they graduate from college. They should thus be involved in and prepared for this process. Make sure they understand the terms of any loan and when interest begins to accrue. They should also learn about different student loan refinance plans.

2. Warn About Scams

  • Elderly people are not the only ones falling victim to financial scams. Predators may also target naïve students. Talk to your child about common scams and how to avoid them. Specifically, your teen should understand how to spot bogus emails, texts, and calls demanding cash or requesting payment of a fake bill.

3. Teach Then To Budget

  • Budgeting is a key part of financial independence. If you plan to give your college student spending money while at college, consider paying one lump sum at the start of the semester. They will then have to learn how to budget that money over the ensuing months. You and your teen should also make a formal budget by writing down expected income and expenses each month. Make sure that you both understand which costs your student will pay, and which ones you will help cover.
  • You may also want to give your child a fixed amount of cash to use on certain expenses, such as textbooks. Tell your teen that he can keep any of this money that they do not spend. This will encourage them to look for cheaper options, such as used or electronic textbooks. You and your child should also talk about this budget at the end of each semester. The two of you can then adjust the budget if necessary. After a year or two in college, your kids will understand how they are spending their money and learn how to save up for larger, entertainment-related expenses such as concert tickets.
  • They should also realize the importance of making financial tradeoffs. For instance, if your child wants a new car, he may have to work extra hours or sacrifice some outings with friends in order to afford this expense. Learning this lesson as a young adult will make it easier to handle finances once he is completely independent.

4. Let Them Make Mistakes

  • Of course, budgeting for the first time often leads to mistakes. Your kid may spend a ton of money on restaurant meals early in the semester and then not have enough cash left over for other bills. It may be tempting to lecture your child in this situation, or to simply fix the issue.
  • However, they will not learn anything if you immediately come to the rescue. A few minor missteps should not ruin your teen’s finances, and they should teach him how to better manage money in the future. Instead of admonishing your child, help come up with a solution.

5. Let Them Be Independent

  • Similarly, your child should learn that you will not be able to support her financially forever. You do not have to cut him off entirely, however. Instead, slowly cut back on the amount of money you give each semester. Even before she goes to college, you should also have her start paying at least two of her bills each month. If she has to use her own money to cover a cell phone or iTunes bill, she may be more judicious with all purchases. Once your child leaves for college, she will be one step closer to adulthood. To fully prepare for life on her own, make sure she understands how to manage finances.

Craig Middleton

  • Craig is a New York City-based retired business consultant, who is an expert in education and cultural trends. He has a Masters of Business Administration and a Masters in Education from St. Johns and loves sharing his knowledge on the side through his writing. If you have any questions or comments you can direct them to Craig at craigmiddleton18@gmail.com.
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